NOWPayments is continuously enhancing its services to provide merchants with flexible and efficient solutions for handling cryptocurrency payments. We are continuing our series of articles about NOWPayments’ solutions everybody should know about. This time we’ll talk about NOWPayments Custody, a feature designed to help merchants accumulate payments on the NOWPayments side and withdraw them at their convenience. In this article, we will explore the ins and outs of NOWPayments Custody, including how to activate it, the benefits it offers, and how it can be leveraged via the Custody API.
Understanding Crypto Custody Solutions
Crypto custody solutions serve as a secure environment for storing and managing digital assets. They function as digital vaults, ensuring the safety and accessibility of cryptocurrencies. NOWPayments, at its core, operates as a non-custodial service, where payments from customers are instantly processed and directed to the merchant’s wallet. However, NOWPayments also offers an optional crypto custody solution, providing an alternative approach for businesses.
Introducing NOWPayments Custody
NOWPayments Custody is a service that empowers merchants to gather their cryptocurrency payments within the NOWPayments platform. This streamlined approach simplifies payment management, reducing the complexity of multiple individual transactions. Instead of incurring network fees for each payment received, merchants can efficiently aggregate payments and pay a single network fee when choosing to withdraw funds from Custody.
Advantages of NOWPayments’ Crypto Custody Solution
NOWPayments’ crypto custody solution comes with a host of benefits, making it an enticing option for businesses:
- Network Fee Savings: Network fees can accumulate rapidly, particularly for businesses receiving numerous crypto payments daily. NOWPayments’ custody solution allows businesses to significantly reduce these costs. By storing payments within the NOWPayments account and withdrawing them in a single transaction, merchants only incur one network fee for the entire amount.
- Security of Funds: When utilizing the custody solution, businesses can trust that their funds are secure within their NOWPayments account. Security is paramount in the cryptocurrency world, and NOWPayments ensures that your digital assets are protected.
- Efficient Mass Payouts: For businesses needing to perform crypto mass payouts, such as disbursing annual cryptocurrency bonuses or affiliate commissions, NOWPayments’ crypto custody solution streamlines the process. With custody activated, businesses can execute mass payouts to multiple recipients in a single API call, without incurring additional charges, except for the standard network fee.
- Access to the Custody API: You will be able to create user deposit accounts and offer a comprehensive cryptocurrency billing solution in your business.
Use Cases for NOWPayments’ Crypto Custody Solution
1. E-commerce Platforms:
- Online Retailers: E-commerce businesses can accumulate cryptocurrency payments, enabling them to efficiently manage and consolidate transactions. They can also leverage Custody for refund processing.
- Marketplaces: Multi-vendor marketplaces can use Custody to facilitate bulk payments to multiple sellers, streamlining their payout processes.
2. iGaming Industry:
- Gaming Platforms: Online gaming platforms can accumulate in-game cryptocurrency purchases or rewards, making it easier to manage virtual currency transactions.
- Game Developers: Game developers can use Custody to efficiently distribute in-game assets, rewards, or cryptocurrency-based items to players.
3. Cryptocurrency Exchanges:
- Crypto Trading Platforms: Cryptocurrency exchanges can utilize Custody to consolidate withdrawal requests from multiple users, thus optimizing their transaction processing and reducing network fees.
4. Cryptocurrency Mining:
- Mining Pools: Mining pools can use Custody to accumulate mining rewards and distribute them to participants in a single, cost-effective transaction.
5. Neobanks and Fintech Startups:
- Digital Banks: Neobanks and digital banking services can streamline cryptocurrency-related services, such as interest payments or account withdrawals, using Custody.
6. Affiliate Marketing:
- Affiliate Networks: Affiliate networks can utilize Custody to efficiently make commission payments to affiliates, reducing overhead costs associated with individual payouts.
7. Employee Compensation:
- Remote Workforces: Companies with global workforces can use Custody to distribute salaries, bonuses, or benefits in cryptocurrencies, simplifying cross-border payments.
8. Charities and Fundraising:
- Nonprofit Organizations: Charities and nonprofits can benefit from Custody by aggregating cryptocurrency donations and efficiently managing funds for their charitable causes.
9. Cryptocurrency Staking:
Staking pools can accumulate staked assets and distribute rewards to participants, optimizing their operations and minimizing transaction fees.
10. Token Generation Events:
Token projects can use Custody to conduct airdrops to a large number of token holders, saving on transaction fees and simplifying the distribution process.
Activating NOWPayments Custody
Enabling NOWPayments Custody involves the following steps:
- Accept Custody Agreement: Begin by logging into your NOWPayments account and navigating to the Custody section. Accept the Custody agreement to proceed with the activation process.
- Whitelist IP Addresses: After accepting the agreement, you’ll be prompted to whitelist IP addresses. Specify the addresses from which you intend to request withdrawals from Custody. It’s crucial to note that no payouts will be initiated if you omit specifying these IP addresses.
- Activation Confirmation: Click ‘Continue’ and allow a few minutes for the activation process to complete. Afterward, refresh the page. You’ll then notice the wallet address, the accumulated amount, and a withdrawal button displayed on the Custody page. For merchants with multiple wallets, separate withdrawal buttons are available for each.
- Custody balances reflect only funds that have transited through the NOWPayments system. If you had existing funds in your wallet before adopting Custody but haven’t received any payments through NOWPayments, your Custody balance will display as 0.
- To activate Custody successfully, you must add an Outcome wallet and generate an API key. Neglecting these steps will result in Custody remaining inactive.
Streamlining Mass Payouts with NOWPayments Custody in Your Account
NOWPayments Custody streamlines the process of conducting mass payouts to multiple recipients. To initiate mass payouts, follow these steps:
- Upload CSV File: In the Custody section, select the Mass Payouts option. Proceed to upload a CSV file containing the addresses to which you intend to make payouts.
- Automatic Processing: The system automates the process, seamlessly sending payouts from Custody to the specified addresses. It’s essential to note that mass payouts will incur network fees, which will be deducted from your Custody balance.
- Address Whitelisting: To ensure smooth payout requests, verify that you’ve whitelisted the recipient wallets and IP addresses.
Partner Integration and User Accounts
NOWPayments’ partner integration extends beyond Custody activation, allowing partners to assume master accounts. As master accounts, partners gain the capability to create user accounts for their associates. These user accounts function independently, with no interconnection. Partners can seamlessly transfer funds to user accounts, facilitating efficient fund management.
Harnessing the Custody API
NOWPayments offers a robust Custody API, enabling partners to establish deposit accounts for their users, providing a comprehensive crypto billing solution. Key API endpoints and functionalities include:
- Create New User Account: Utilize the https://api.nowpayments.io/v1/sub-partner/balance endpoint to create user accounts, enabling the generation of payments, deposits, and withdrawals.
- Create Recurring Payments: The https://api.nowpayments.io/v1/subscriptions endpoint facilitates the creation of recurring charges from user accounts. Payments are automatically transferred from user accounts to your account based on the customer’s chosen plan.
- Get User Balance: Access user balances using the https://api.nowpayments.io/v1/sub-partner/balance/:id endpoint, provided that you’ve whitelisted IP addresses.
- Manage Users and Transfers: Leverage various endpoints, including https://api.nowpayments.io/v1/sub-partner?id=111&offset=1&limit=10&order=DESC, https://api.nowpayments.io/v1/sub-partner/transfers?id=111&status=CREATED&limit=10&offset=1&order=ASC, and https://api.nowpayments.io/v1/sub-partner/transfer/:id, to retrieve lists of users and transfers, access specific transfer details, and create transfers between user accounts.
- Deposit and Withdraw Funds: Initiate deposits, transfer funds between user accounts, and withdraw funds from user accounts to your master account using the following endpoints: https://api.nowpayments.io/v1/sub-partner/payment, https://api.nowpayments.io/v1/sub-partner/deposit, and https://api.nowpayments.io/v1/sub-partner/write-off.
Conclusion: Empowering Crypto Payment Management
NOWPayments Custody stands as a robust tool, simplifying cryptocurrency payment management for merchants. By consolidating payments and enabling crypto mass payouts, it effectively reduces network fees and streamlines the payment process. Moreover, partners can harness the Custody API to create and oversee user accounts, providing a comprehensive crypto billing solution. Embrace NOWPayments Custody today to unlock the full potential of your cryptocurrency payment experience, and stay at the forefront of crypto innovation.